Today’s IG Corporate dollar DCM finished with a YTD record of 14 issuers that priced 22 tranches between them totaling $14.675b. Leading the pack: Aetna (NYSE: AET), American Water Capital, Ares Capital (NASDAQ: ARCC), Duke Energy (NYSE: DUK), Kraft Heinz (NYSE:HNZ), Regions Financial (NYSE: RF), and UBS Group (NYSE: UBS). The SSA space was quiet. This past March 6th the IG Corporate space featured 12 issuers and April 27th also hosted 12 IG Corporate issuers. But today takes the cake for the most number of issuers YTD. The DJIA closed at its 9th consecutive new high. The S&P also ended the session at a new all-time high.

Here’s how this week’s IG Corporate volume numbers measure up against the WTD and MTD syndicate estimates:

The IG Corporate WTD total is 42.80% of this week’s syndicate midpoint average forecast or $14.675b vs. $34.29b.

MTD we’ve priced 45.13% of the syndicate forecast for July or $35.70b vs. $79.10b.

There are now 4 issuers in the IG credit pipeline.

Today’s IG Primary & Secondary Market Talking Points

Kimco Realty Corp. upsized its $25 par PerpNC5 Class “L” cumulative redeemable preferred stock new issue to $225mm from $150mm at the launch and at the tightest side of price talk.

· N. Korea launches ICBM on 7/28. Jong-Un claims Hwasong-14 missile can reach any location on the U.S. continent. UN projects worst famine in NOKO in 17 yrs; last one killed 2mm (8% of population). Fear that NOKO may use nuclear intel/systems as barter for food w/”suspect” nations. U.S. has already sanctioned certain Chinese banks to pressure the PRC to use more influence over NOKO which has failed. U.S. lofts Trident missile in Pacific Ocean in response. China insiders say PRC does not have the influence on NOKO that the U.S. thinks it does.

ELEVATEDBREXIT Fallout

· U.K. PM May is on the hot seat. Macron-Merkel coalition to squeeze U.K. for all it can. France pressing for $115b equivalent.
Venezuela – civil unrest as Maduro dictatorship claims bogus election outcome favors unlimited powers and a new constitutional assembly in elections that U.S. and key LATAM nations will not acknowledge. Caracas named most dangerous city in the world with highest murder rate. VZ gov’t stopped publishing crime stats a decade ago. Dictatorship in our Western Hemisphere. U.S. Tsy. freezes Maduro family assets.

Let’s go straight to the “QC” Deal Dashboard for pricing intel and book sizes/bid-to-cover rates. Here’s a look at spread compression throughout price evolution during today’s two-part book build from IPTs to the launch and final pricing:

Issue

IPTs

GUIDANCE

LAUNCH

PRICED

Spread
Compression

NICs
(bps)

6NC5 FRNs

3mL+equiv

3mL+equiv

3mL+95

3mL+95

<20> bps

2.5

6NC5F-t-F

+125a

+110a (+/-5)

+105

+105

<20> bps

2.5

………and here’s a snap shot of today’s final book sizes and oversubscription rates:

It was yet another very busy and high volume day today in our IG dollar DCM that featured 6 IG Corporate issuers across 13 tranches totaling $20.50b led by a $13.55b 4-part from Broadcom and a $2.5b 3-part deal from General Motors Financial Co. Inc. Additionally, 2 SSA issuers brought 2 tranches adding another $1.75b thereby bringing the all-in IG day totals to 8 issuers, 15 tranches and $22.25b.

The WTD IG Corporate-only total is now $32.05b or 10% more than this week’s $30.13b syndicate midpoint average estimate.MTD we have now realized $85.283b or 79% of the syndicate forecast for all of January which is $108.41b.All-in IG Corporate plus SSA MTD issuance currently stands at: $111.533b.

Mischler Financial served as an active Co-Manager on today’s $2.5b 3-part Senior Unsecured Notes new issue for General Motors Financial Co. Inc. and so it is today’s Deal-of-the-Day. You know the routine, let’s re-cap the day first and then it’s on to the GM Deal Dashboard and drill-down.

Investment grade corporate bond trading posted a final Trace count of $20.3b on Tuesday versus $16.7b on Monday (the 7th highest day since 2006) and $22.4b the previous Tuesday.

Syndicate IG Corporate-only Volume Estimates for January

IG Corporate New Issuance

This Week
1/09-1/13

vs. Current
WTD – $32.05b

January 2017
Forecasts

vs. Current
MTD – $85.283b

Low-End Avg.

$29.04b

110.37%

$107.87b

79.06%

Midpoint Avg.

$30.13b

106.37%

$108.41b

78.67%

High-End Avg.

$31.22b

102.66%

$108.96b

78.27%

The Low

$20b

160.25%

$80b

106.60%

The High

$40b

80.13%

$145b

58.82%

Rates Trading Lab

If you were hoping to hear news on the Trump Administration’s plans for the economy (fiscal policy) in today’s press conference you were sorely disappointed. The mass media proved once again they are pretty close to being worthless. The majority of the questions directed to President-Elect Trump concerned Russia and Putin. Some of the things we did learn from Trump today were his plans to step away from the Trump Organization, he will pick a Supreme Court nominee within 2 weeks of his inauguration, he thinks leaks are coming from the intelligence community and CNN is not high on his list.

UST’s dealt with conflicting items today. The 10yr had a bid heading into the $20b 10yr auction and rallied after the auction results were very strong (details below). It was the 4th very strong Treasury auction in a row. Treasuries came under pressure after the auction bounce and the most likely reason for the selling was the 4-part $13.55b Broadcom deal. The deal was much bigger than expected ($6b). Broadcom was the highlight deal but not the only one today. The new issue markets in the U.S. and Europe remained very active. At the 3pm close benchmark UST’s were better bid by 0.3 bps (5yr: 1.876%) to 1.4 bps (30yr: 2.957%).-Tony Farren